Big investors queue up for GMR Infra, stock soars over 5%

MUMBAI: GMR Infrastructure’s massive debt burden could ease if it manages to sell shares in its airport subsidiary to investors. Shares in the Bengaluru-based GMR rose 4.85% on Monday after ET reported that the Prem Watsa-controlled Fairfax Holdings, Singapore’s Changi Airports as well as buyout giants like KKR and Apollo are looking to buy a 30% stake in the company. The stake sale will help GMR reduce its Rs 40,500-crore debt.

The investors are believed to be valuing the airport subsidiary at Rs 10,000 crore which is nearly 3% higher than the current market capitalisation of the listed entity. GMR shares, which closed at Rs 16.20 on Monday, rose as much as 8.7% to Rs .85 earlier in the day.

Analysts said the Indian infrastructure firm seems to have utilised the pickup in the core infra-related segments and improved appetite from strategic and financial investors, towards its favour as most of its assets have become operational and are ready to sell at a larger value, which it would not have got 12-18 months ago.

Shares in the company has risen nearly 30% since ET reported on Oct 7 that the group has mandated Credit Suisse to find suitors for the airport holding company.

“In groups like GMR, the absolute level of debt has continued to rise despite the asset sales on account of ongoing capex and operational losses,” Credit Suisse said in a note in October.